All Forum Posts by: Account Closed

@Judy Parker thank you for the info! I’ll check PC Richard out.

@Brandon C. The rehab cost is rolled into the mortgage for a 203k loan. For example if you get a property for $350k and $50k of rehab is needed then $14k would be your down payment (3.5% of $400k) and the loan amount would be $386k. My loan guy said closing costs will probably be in the ballpark of $12k and then you would want to have at least $10k in reserves. This comes out to needing $36k on hand at the minimum before buying this type of property.

@Jovensky Fenelon with $40k to work with FHA loans are probably going to be your best bet. I'm using an FHA 203k loan for my first property, which rolls rehab costs into the mortgage with 3.5% down. This means that theoretically $40,000 will get you into a $500k property with $17,500 down and leave you with $22,500 for closing costs and reserves. The catch is you have to live in the property for a year. So you could either get a 2-4 unit multi family and live in one of the units or rent out a single family by the room.

Hello,

I was talking with my contractor and he said to be wary of some companies that sell appliances as factory seconds. He has seen appliances advertised as having a small dent on the side, but delivered with a huge dent on the front, or other issues. Does anyone have trustworthy companies they use for seconds?

I know the pain haha I'm looking in north Jersey and there aren't a lot of deals to be had. Would you be fine with a rehab?  It looks like focusing on value add opportunities is the way to go right now, although even a lot of the homes in need of a total rehab are overpriced. 

Since you'll be managing the property and rehab I don't think it is unreasonable to get another 5-10% or so of equity. If your partner will be completely hands off then a 35/65 or 40/60 split seems fair. I would also agree on a "worse case" scenario where if all of the reserves have been used then make sure it's understood how the extra expenses will be split.